Sino-australian Trade On China's Economy

Since Chinese Reform and Opening-up, in our government domestic pushing positive foreign trade policies and measures, and the trend of economic globalization deepening, Chinese foreign trade develops rapidly, which has been improving the international trade development in the world and providing the favorable support for rapid economic development in China. Among the whole foreign trade, Sino-Australian bilateral trade develops very fast, including its value and scale increases rapidly. Although its volume proportion in our country is far less than the Chinese foreign trade with the Unites States, Japan and some other countries, it begins to attract more and more attentions of the two countries, mainly because the imports and exports are important to the two countries'economic development. At first, because Chinese industrialization develops rapidly and industrial export products increases unceasingly, our country demands primary product which is Australian rich resource intensive products. Through increasing imports, it can satisfy the rising demand of our country for primary products; meanwhile it is also of benefit to the Australian. The Australian imports in the cheap labor-intensive products has brought great benefits the Australian consumers in some extent, it is helpful for Australia to rein in inflation pressure, at the same time we can provide a stable sale place for Australian export manufacturers because our country has a huge import market, which leads them to their unlimited business opportunities. Thus Sino-Australian bilateral trade is intertwined for the two countries. This paper is mainly researching the Sino-Australian bilateral trade on the influence of economic development in our country.This research commences the investigation of the rapid development of Chinese foreign trade status quo, including the total foreign trade value, improving the import and export commodity structure and the diversification of the market, which plays an important role on our country economic development. Then it concretely analyses Sino-Australian bilateral trade has rapidly developed after diplomatic relations between the two countries in these nearly 40 years, and researches its state quo, which is the rapid growth of the total import and export volume and the product structure improvement. Furthermore, through the qualitative and quantitative analysis of the bilateral trade fast developed foundation, namely the trade compatibility through the different factor endowments in two countries and using the calculation of the three indexes in ten categories of products for specific analysis with standard classification by Standard International Trade Classification, which are Revealed Comparative Advantage Index, Trade Complementarities and Trade Competitive Advantage, which can explain that the same commodities of the two countries have different comparative advantages, and the two countries have trade complementarities. China mainly exports labor-intensive products to Australia and imports resource-intensive products from Australia, which is according with the two countries actual situations of factor endowments, so the bilateral trade has a solid foundation. After analyzing the trade compatibility and the state quo, through building the model, it analyzes the Sino-Australian trade growth on the influence of the economic development in our country. By empirical analysis which is the unit root test, co integration test, error correction model and Granger causality test, we can draw the Sino-Australian total trade value with Chinese GDP has a long-term and stable relationship, meanwhile in the short-term the two countries bilateral trade volume produces positive influence on the Chinese GDP. Because the short-term adjustment coefficient is significant, Chinese GDP that actually happened in each year and long-term equilibrium value deviation 28% has been revised. At the same time through Granger causality test, it can indicate that Sino-Australian total trade value with Chinese GDP is a reciprocal causation. After the empirical analysis by the established model, the development of Sino-Australian bilateral trade plays an important role on our country economic development. Finally, it explains the existing challenges in the trade briefly, as well as our country should take some policies and measures to tackle these problems, making sure the bilateral trade could develop stably and make more contribution to our economic development.